U.K. Stocks Fall for Second Day Amid Concern Over SyriaInyoung Hwang
U.K. stocks fell for a second day as concern grew that the U.S. and allied nations will take military action against Syria.
International Consolidated Airlines Group SA led declines in the FTSE 100 Index as the price of oil climbed to a 17-month high, while Royal Dutch Shell Plc and Tullow Oil Plc rose more than 1 percent. Meggitt Plc, the largest provider of wheels and brakes for military aircraft, lost 1.1 percent after agreeing to buy Piezotech LLC.
The FTSE 100 slipped 10.91 points, or 0.2 percent, to 6,430.06 at the close in London, paring an earlier retreat of as much as 0.7 percent. The benchmark gauge slid 0.8 percent yesterday after U.S. Secretary of State John Kerry said the Obama administration will hold Syria accountable for the chemical-weapon attacks that opposition groups say killed as many as 1,300 people. The index has climbed 9 percent this year.
“The situation with Syria has expressed itself through the oil price, and we’re seeing two airlines being among the biggest declines in the FTSE 100,” Keith Bowman, an equity analyst at Hargreaves Lansdown Plc in London, said by telephone. “Although Syria itself isn’t a major economy and doesn’t hold a strategic position in the oil industry, there is concern over the broader implications for the Middle East.”
The U.S., France and Britain have moved closer to military action against Syria, laying out the justification, putting forces into place and rounding up allies in the region.
The countries will focus any armed response on Syria’s weapons capabilities, rather than directing their efforts at deposing President Bashar al-Assad, U.S. and U.K. officials said. British Prime Minister David Cameron said in London that any course of action would be legal and proportionate.
The volume of shares traded in FTSE 100-listed companies was 18 percent greater than the average of the last 30 days, according to data compiled by Bloomberg. The broader FTSE All-Share Index slid 0.3 percent today, while Ireland’s ISEQ Index retreated 0.5 percent.
Bank of England Governor Mark Carney, speaking to business leaders in Nottingham, England, said officials are ready to add stimulus if investor expectations for higher interest rates rise too far and undermine the recovery.
Travel and leisure companies posted the third-largest decline of the 19 industry groups in the Stoxx Europe 600 Index, as West Texas Intermediate crude advanced 1 percent to $110.11 a barrel at 11:58 a.m. New York time. IAG, the owner of British Airways, tumbled 4.5 percent to 287 pence. EasyJet Plc, Europe’s second-largest discount carrier, retreated 1.8 percent to 1,212 pence.
Shell, Europe’s biggest oil producer, added 1.8 percent to 2,130 pence. Tullow Oil, which operates rigs in East Africa, rose 1.2 percent to 1,026 pence.
Meggitt fell 1.1 percent to 526.5 pence, the lowest price in two months. The company said it has signed an agreement to buy Piezotech for $41.2 million in cash. The deal will strengthen Meggitt’s sensing-systems business, according to a statement.
Kenmare Resources Plc plunged 8.6 percent to 27 pence for the biggest drop since June 21. The minerals producer posted a net loss of $10.2 million in the first half, compared with a profit of $38.8 million in the year-earlier period.
Chime Communications Plc slipped 1.3 percent to 310 pence. The sports-marketing company reported that its operating profit and pretax profit both fell 73 percent in the first half.
G4S Plc climbed 2.9 percent to 252.40 pence. The security-services company said it has found buyers for two businesses to raise 100 million pounds ($155 million) and has lined up an additional 150 million pounds of potential disposals. G4S sold 141 million new shares, or about 10 percent of its equity, to existing investors at 247 pence each.
Chief Executive Officer Ashley Almanza has made reducing the company’s net debt of 3.2 times earnings a priority.